Uber lost its fight to break into the teeming Chinese transportation market on Monday when it agreed to sell its China operations to Didi Chuxing, its primary rival there.
And what a fight it was.
Uber has handily overtaken competitors in the U.S. like Lyft and Sidecar, forcing some rivals to join forces in hopes that, by creating alliances, they can become formidable challengers to the industry juggernaut. But no competitor seems to have riled the company as much Didi, whose tacticians play by the same scorched-earth strategies Uber has used to win market share around the world.
That makes the internal memo sent by Didi President Jean Liu announcing the two companies’ new arrangement so fascinating and bizarre.
In the memo, obtained by the Financial Times, she rhapsodizes about the two-year battle:
Uber, according to Didi president Jean Liu, “has done better than any Silicon Valley company in China” she said in a flowery internal email announcing the deal: “Uber has been a grand rival and we have had an epic battle … We raged an earth-shaking war, and when we join hands, our love will last till the end of time.”
The roughly $35 billion deal gives San Francisco-based Uber Technologies a one-fifth stake in Didi, which won a major coup three months ago when it secured $1 billion funding round from Apple.
The agreement also allows Uber ― the world’s most valuable private startup, at $62.5 billion ― to invest in other markets and tie up loose ends as it prepares for an initial public offering that’s expected sometime in the next year.
To do well as a publicly-traded company, Uber needs to prove that it’s making money, which it claims to be doing in the U.S. and Canada. Huge losses in China, pegged at about $2 billion over the last two years, hampered that growth.
Note: The Huffington Post’s Editor-in-Chief Arianna Huffington is a member of Uber’s board of directors, and has recused herself from any involvement in the site’s coverage of the company.